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Developments in Environmental, Regulatory and Aboriginal LawWed, 15 Nov 2017 00:26:17 +0000en-UShourly1https://wordpress.org/?v=4.7.8No Easy Way Out: BC Utilities Commission Issues Final Report Following Site C Inquiry Processhttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/xMAgPEQcvvY/
http://www.canadianeraperspectives.com/2017/11/no-easy-way-out-bc-utilities-commission-issues-final-report-following-site-c-inquiry-process/#respondWed, 15 Nov 2017 00:26:17 +0000https://www.canadianeraperspectives.com/?p=1226Continue Reading]]>During BC’s provincial election campaign in May 2017, the NDP promised to send the Site C project for review by the BC Utilities Commission (BCUC) if it was elected. Site C, a multi-billion dollar project to construct a third dam and generating station on the Peace River in northeast BC, had received approval from the previous BC Liberal government to begin construction in December 2014. After taking the reins of provincial government in July 2018, newly sworn in Premier John Horgan made good on his party’s promise and the government issued an Order in Council (OIC) requesting that BCUC undertake an inquiry into certain aspects of Site C. On November 1, 2017, BCUC’s four-member review panel (the Panel) delivered its final Site C Inquiry Report (the Final Report) to the government.

Scope of Review

As an exempt project under the BC Clean Energy Act, BCUC has no jurisdiction over the project. However, the inquiry was carried out under section 5 of the BC Utilities Commission Act, which enables the Lieutenant Governor in Council to set terms of reference and direct BCUC to inquire into any matter. Pursuant to the OIC, BCUC was asked to advise on the implications of:

completing Site C by 2024, as currently planned;

suspending Site C, while maintaining the option to resume construction until 2024; and

terminating construction and remediating the site.

The government also requested that BCUC address a number of more specific issues such as what, if any, commercially feasible generating projects and demand-side management initiatives (e.g. energy efficiency programs) could provide similar benefits to ratepayers with an equal or lower per-unit energy cost as Site C could provide.

The Site C inquiry process was carried out in two phases. The first phase took place between early August and mid-September 2017, and involved fact gathering from BC Hydro, Deloitte LLP (which produced independent reports on many of the questions set out in the OIC), and members of the public. This data informed a preliminary report issued by BCUC on September 20, 2017. Following the issuance of the preliminary report, BCUC initiated the second phase of the process, which included further information gathering from BC Hydro and a series of community input sessions around the province, including meetings with First Nations. In total, BCUC received 620 written submissions and heard from 304 speakers during 11 community input sessions, with three additional First Nations input sessions and two technical presentation sessions. This information-gathering and consultation process was followed by a review period, which culminated in the publication of the Final Report.

Panel’s Key Findings

The Panel’s nearly 300-page report set out the following key findings:

Completion Scenario: The Panel was not persuaded that Site C would remain on schedule for a November 2024 in-service date. Further, the Panel estimated that completion costs may exceed $10 billion and, in the worst case scenario, could exceed the proposed budget of $8.335 billion by 20 to 50%. The Panel also observed that completion could result in other negative consequences, such as potential infringement of First Nation treaty and Aboriginal rights.

Suspension Scenario: The Panel found the suspension and potential restart scenario to be the least attractive of the three alternatives posed in the OIC. The Panel concluded that this alternative would be both the most expensive, adding at least an estimated $3.6 billion to final costs, and the most risky because, for example, existing environmental permits would expire and new approvals would be required, introducing uncertainty. The Panel further observed that contracts would have to be retendered and First Nations’ benefit agreements potentially renegotiated. In any event, the Panel added, there would be no guarantee that the project budget would be sufficient to complete the project following remobilization.

Termination Scenario: The Panel estimated that termination and remediation costs of the project would reach approximately $1.8 billion, with additional costs of finding alternative energy sources to meet demand.

Overly Optimistic Load Forecasts: The Panel found BC Hydro’s load forecasts (i.e., demand projections) to be overly optimistic. The Panel declined to adopt BC Hydro’s mid load forecast, instead adopting the low load forecast in performing its analyses. The Panel added that there remained a risk that demand would not even reach the low load forecast.

Disruptive Factors: The Panel noted a number of disruptive factors that, in addition to construction and operating risk, would pose risks during the economic life of Site C and potentially reduce the anticipated benefits of the project. The Panel cited future technological advances in renewable energy and energy storage capacity through utility-scale battery storage, as well as other factors subject to considerable uncertainty such as the effects of climate change.

Viable Alternatives: The Panel expressed its view that alternative energy sources such as wind, geothermal, and industrial curtailment could provide similar benefits to ratepayers as Site C, with an equal or lower per-unit energy cost.

The Panel acknowledged that neither completing Site C nor implementing a portfolio of alternative energy sources is without risks, which are explored further in the Final Report.

Fate of Site C is Now in BC Government’s Hands

So what does all of this mean for the future of Site C? It is first important to understand what the Final Report is not: it is not a recommendation as to which of the three alternatives referred to in the OIC should be pursued, nor is it a “decision” on the future of Site C or a “reconsideration” of decisions made in the environmental assessment process or by statutory decision makers or the courts. The Panel’s mandate was more modest, i.e. to provide information requested in the OIC. As clarified in the Final Report, the Panel took no position on which scenario should be pursued. Nonetheless, given the Panel’s concerns expressed in the Final Report, the BC government will need to carefully weigh the options in making a decision on whether to let Site C proceed, or whether to pull the plug on the project.

While the Final Report does not make any particular recommendation on Site C, the BC government has indicated that the future of the project remains uncertain. In a press release issued shortly after the issuance of the Final Report, Minister of Energy, Mines and Petroleum Resources Michelle Mungall outlined the next steps in the Site C saga: “Now it is our turn, as government, to determine whether Site C is in the best interests of British Columbians, after considering the BCUC’s findings and other issues outside the scope of this review.” As Minister Mungall noted, the government is faced with an “extremely difficult decision” as it continues to review the Final Report and meet with First Nations, among other groups. The Minister expects that the government will make a decision on the project by the end of the year.

]]>http://www.canadianeraperspectives.com/2017/11/no-easy-way-out-bc-utilities-commission-issues-final-report-following-site-c-inquiry-process/feed/0http://www.canadianeraperspectives.com/2017/11/no-easy-way-out-bc-utilities-commission-issues-final-report-following-site-c-inquiry-process/Supreme Court Dismisses Aboriginal Spiritual Rights Charter Claimhttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/0zMebAWNZm4/
http://www.canadianeraperspectives.com/2017/11/supreme-court-dismisses-aboriginal-spiritual-rights-charter-claim/#respondThu, 02 Nov 2017 22:55:46 +0000https://www.canadianeraperspectives.com/?p=1219Continue Reading]]>The Supreme Court of Canada (SCC) released a decision earlier today dismissing a novel Aboriginal freedom of religion Charter claim that was raised in opposition to a ski resort development in British Columbia: Ktunaxa Nation v. British Columbia (Forests, Lands and Natural Resource Operations), 2017 SCC 54 (Ktunaxa). This is a significant case as it is the first time the SCC has been asked to consider an Aboriginal spiritual rights claim and the protections that may be afforded to it under s. 2(a) of the Charter in addition to s. 35 of the Constitution Act, 1982. McCarthy Tétrault LLP (Neil Finkelstein, Brandon Kain, and Bryn Gray) intervened in this case on behalf of the Canadian Chamber of Commerce.

Ktunaxa limits the scope of potential Aboriginal spiritual rights claims that may be protected under s. 2(a) of the Charter, which is significant given that there are Aboriginal spiritual rights claims across Canada that are attached to vast tracts of land. The decision also importantly confirms once again that Aboriginal groups do not have a veto over projects and that developments can proceed without consent if adequate consultation has occurred, except in limited cases of established rights, such as established Aboriginal title.

Background

In this appeal, the Ktunaxa Nation Council sought to overturn the approval of a Master Development Agreement (MDA) for a new ski resort in the Jumbo Valley in the BC interior on two grounds: (i) the project violated the Ktunaxa’s freedom of religion under s. 2(a) of the Charter and (ii) the government breached it duty to consult. In both instances, the Ktunaxa argued that the development was taking place in a sacred area called Qat’muk that was home to the Grizzly Bear Spirit and that no accommodation of their spiritual rights was possible.

The approval at issue was the last in a serious of approvals granted over 20 years, in which Aboriginal consultation had been undertaken at every stage. Significant accommodation measures were also made to the project in response to concerns raised by the Ktunaxa, including reducing the size of the recreational area by 60 per cent. The First Nation located closest to the project was satisfied with these changes and indicated their support but the Ktunaxa Council, representing three other First Nations, remained opposed. Despite their opposition, the Ktunaxa Council continued to engage in lengthy discussions with the Crown in an effort to find mutually satisfactory accommodation of their concerns. Several accommodation offers were rejected by the Ktunaxa Council but these rejections did not explicitly identify the Grizzly Bear Spirit or the sacred nature of the Jumbo Valley as outstanding concerns that needed to be addressed.

After several years, the Minister advised the Ktunaxa Council that a reasonable consultation process had occurred and that approval for the resort could be given while accommodation discussions continued. The Ktunaxa Council subsequently adopted a “very different and uncompromising position” that the process had not properly considered the sacred nature of the Jumbo Valley and that their spiritual concerns could not be accommodated. This was because a ski resort with lifts to glacier runs and permanent structures would drive the Grizzly Bear Spirit from Qat’muk and irrevocably impair their religious beliefs and practices.

Similar to the BC Supreme Court and BC Court of Appeal, the SCC dismissed the Ktunaxa’s appeal on both grounds.

Freedom of Religion

Majority decision

Chief Justice McLachlin and Justice Rowe for the majority concluded that the Ktunaxa’s spiritual rights claim is not protected by s. 2(a) of the Charter. They held that there are two aspects of the right to freedom of religion, namely the freedom to (i) hold religious beliefs and (ii) manifest those beliefs and that neither were infringed upon in this case. The Minister’s decision did not interfere with the Ktunaxa’s freedom to believe in the Grizzly Bear Spirit or to manifest this belief. Instead, the Ktunaxa were seeking to protect the Grizzly Bear Spirit itself and the subjective spiritual fulfillment that they derive from it, neither of which are protected by s. 2(a) of the Charter.

Concurring reasons

In a concurring in result opinion, Justice Moldaver held that the Minister’s decision infringed s. 2(a) of the Charter because it would interfere with the Ktunaxa’s ability to act in accordance with a religious belief or practice in more than a trivial or insubstantial manner. He held that where state conduct renders a person’s sincerely held religious beliefs devoid of all religious significant, this infringes a person’s right to religious freedom. In this case, he held that the development would render the Ktunaxa’s religious beliefs related to the Grizzly Bear Spirit devoid of any spiritual significance.

Yet despite his finding that the Minister’s decision infringed s. 2(a) of the Charter, he concluded that the Minister’s decision was reasonable because it reflected a proportionate balancing between the Ktunaxa’s s. 2(a) Charter right and the Minister’s statutory objectives, to administer Crown land and dispose of it in the public interest. The Minister tried to limit the impact of the development on the substance of the Ktunaxa’s s. 2(a) right as much as reasonably possible given these objectives with significant accommodation measures. Granting the Ktunaxa a power to veto development over the land would effectively give transfer to them a significant property interest – namely a power to exclude others from constructing permanent structures on public land and regulating a vast area of public land so that it conforms to the Ktunaxa’s religious beliefs. Justice Moldaver concluded that allowing the Ktunaxa to dictate the use of 50 square kilometres of public land in accordance with their religious belief was not consistent with the Minister’s statutory mandate and would significantly undermine if not completely compromise it.

Duty to Consult

The SCC unanimously held that the Minister’s conclusion that the Crown had met its duty to consult and accommodate with the Ktunaxa under s. 35 of the Constitution Act, 1982, and thus his decision to approve the MDA, were reasonable.

The SCC held that the Crown’s consultation with the Ktunaxa was properly characterized by the Minister as “deep” consultation and was adequate, even though the Ktunaxa ultimately did not achieve their desired outcome to cancel development of the resort in Qat’muk to protect the Grizzly Bear Spirit. In so finding, the Court highlighted several important principles of consultation. It noted that the steps in the consultation and accommodation process (first articulated by the SCC in Haida Nation), are “offered as guidance to assist parties in ensuring that adequate consultation takes place”, but the process is not intended as a “rigid test or a perfunctory formula.”[i] Rather, what matters is “whether in fact the consultation that took place was adequate” and whether the process was consistent with the honour of the Crown.[ii] The SCC noted, for example, that it is possible for the Crown to mischaracterize a right and still fulfill the duty to consult.[iii] In addition, “the s. 35 obligation to consult and accommodate is a right to a process, not to a particular outcome” and “s. 35 does not give unsatisfied claimants a veto over development.”[iv]

The SCC also found that the Ktunaxa’s petition for a declaration that Qat’muk is sacred and that permanent construction should be banned from the site was an improper use of the judicial review process. A court that is in judicial review of an administrative decision which centres on the adequacy of consultation, is not equipped to pronounce on the validity of an unproven claim to a sacred site and associated spiritual practices. Similarly, administrative decision-makers may need to assess the prima facie strength of unproven claims, but proving Aboriginal rights claims requires a trial in which evidence can be tested, and “with the benefit of pleadings, discovery, evidence and submissions.”[v] The SCC recognized the concerns raised by the Ktunaxa if their claimed right were not protected, but noted that “in the difficult period between claim assertion and claim resolution, consultation and accommodation, imperfect as they may be, are the best available legal tools in the reconciliation basket.”[vi] The SCC also commented that injunctive relief to delay a project may also be available in such cases.[vii]

Discussion

This decision is significant for a number of reasons:

1. It restricts Aboriginal spiritual rights claims under the Charter

First, it restricts the types of Aboriginal spiritual rights claims that will engage freedom of religion protections under the Charter. In particular, the fact that certain land is sacred to an Aboriginal group does not mean that any development of that land would violate the freedom of religion of the specific group. The development must interfere in a non-trivial way with the Aboriginal group’s ability to hold or manifest a particular religious belief, such as interfering with an Aboriginal group’s ability to engage in a particular spiritual practice on a specific area of land.

Moreover, even if there is an infringement of freedom of religion, this does not mean a development cannot proceed because the religious freedoms of the particular Aboriginal group must be balanced with the relevant statutory objectives at issue. The majority reasoning did not address this balancing exercise because they concluded that freedom of religion was not engaged in this case. However, the minority concurring opinion did so and the reasoning suggests that broad Aboriginal spiritual rights claims that effectively amount to a power of exclusive use or veto over land use will not meet a proportionality test. While this is in the Charter context, the decision further underscores the balance and compromise that is necessary on both sides in Aboriginal rights disputes and the risk that Aboriginal groups take in putting forward absolutist positions.

2. It emphasizes that consultation is a “two-way street”

The SCC repeated the well-established principle that there are reciprocal obligations on Aboriginal groups to facilitate the process of consultation and accommodation by, among other things, setting out claims clearly and as early as possible, not frustrating the Crown’s reasonable good faith attempts at consultation, and not taking unreasonable positions to thwart the Crown from making decisions where agreement cannot be reached, despite meaningful consultation.[viii]

In its review of the facts, the SCC noted the extensive consultation that took place over two decades, and which in the Minister’s view, had come to a conclusion in 2009. The SCC noted that there had been multiple occasions up to that point in which the Crown offered accommodation and the Ktunaxa had the opportunity to raise concerns, but they did not raise any specific concerns regarding the Grizzly Bear Spirit and the sacred nature of the Jumbo Valley. Rather, by 2009, the Minister had concluded that the Ktunaxa’s outstanding concerns related primarily to interests other than their asserted Aboriginal rights and title claims.[ix]

Only after the Minister had concluded consultation was complete, did the Ktunaxa first raise the specific concerns regarding the Grizzly Bear Spirit and take the new position that no accommodation was possible and that a complete rejection of the resort was the only solution. At that late stage, the Ktunaxa indicated that there was no point in any further consultation, although the Minister attempted to further consult. The late and uncompromising approach taken by the Ktunaxa in asserting their new claim was noted by all three levels of court, and in our view was not an insignificant factor in assisting the courts with reaching their decision. This decision therefore sets a strong example of the importance placed by the courts on the reciprocal obligations of Aboriginal groups in consultation.

3. It re-confirms that s.35 provides a right to a process, not to a veto or the right to consent

The SCC confirmed that the process of consultation does not provide any guarantee that the specific accommodation sought by an Aboriginal group will be warranted or possible. The ultimate obligation, rather, is that the Crown act honourably.[x] The Court went on to emphasize that the duty to consult does not provide Aboriginal groups a veto over development and that “where adequate consultation has occurred, a development may proceed without the consent of an Indigenous group”.[xi] The SCC reiterated that “consent is required only for proven claims, and even then only in certain cases”, such as in cases of established Aboriginal title.[xii]

Justice Moldaver’s concurring reasons regarding freedom of religion also recognized the difficult position that the Minister was placed in to either fulfill his statutory objectives or to provide the Ktunaxa with what would amount to a veto right against any development over fifty square kilometres of Crown land, on the basis of unproven claims. In his view, the Minister’s rejection of such a veto right was reasonable in light of his statutory objectives, while limiting the Ktunaxa’s right as little as reasonably possible.[xiii]

]]>http://www.canadianeraperspectives.com/2017/11/supreme-court-dismisses-aboriginal-spiritual-rights-charter-claim/feed/0http://www.canadianeraperspectives.com/2017/11/supreme-court-dismisses-aboriginal-spiritual-rights-charter-claim/The Role of Regulatory Tribunals in Aboriginal Consultation – The Key Takeaways from Hamlet of Clyde River and Chippewas of the Thameshttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/1GrIIhpSHmg/
http://www.canadianeraperspectives.com/2017/11/the-role-of-regulatory-tribunals-in-aboriginal-consultation-the-key-takeaways-from-hamlet-of-clyde-river-and-chippewas-of-the-thames/#respondWed, 01 Nov 2017 16:47:21 +0000https://www.canadianeraperspectives.com/?p=1209Continue Reading]]>On July 26, 2017, the Supreme Court of Canada (SCC) released its decisions in Hamlet of Clyde River, et al. v. Petroleum Geo-Services Inc. (PGS), et al.[1](Clyde River) and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., et al.[2] (Chippewas) (together, the Decisions). The Decisions concern the role of regulatory boards in fulfilling the Crown’s duty to consult, in the context of two separate project approval decisions of the National Energy Board (NEB). Our discussion of the facts of each case and initial analysis of the Decisions is available here.

The Decisions were released at a critical juncture in the Federal Government’s ongoing review of the NEB and other environmental and regulatory processes, and may provide timely guidance regarding the Federal Government’s proposed reforms regarding the participation of Indigenous peoples.

In the Decisions, the SCC confirmed its finding from Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council[3] (Rio Tinto) that the Crown may rely on a regulatory agency to partially or completely fulfill its duty to consult, provided that the agency has sufficient statutory powers. The SCC reached different conclusions as to the adequacy of the NEB’s consultation efforts in Clyde River and Chippewas but concluded that the current NEB process can be relied upon for consultation and that it is in principle adequate to discharge the duty to consult. In so finding, the SCC provided clarity on certain notable aspects of the Crown’s duty to consult. This article provides our commentary on the most significant findings and their implications.

1. Crown Conduct that Can Trigger the Duty to Consult is Not Limited to Decisions by Ministers, Departments, and Agencies

In Haida, the SCC held that the duty to consult arises when (1) the Crown has knowledge of a potential Aboriginal claim or right; (2) the Crown contemplates conduct; and (3) there is the potential that the contemplated conduct may adversely affect such Aboriginal claim or right (the Haida Test). In Rio Tinto, the SCC commented on the type of Crown conduct that can trigger the duty to consult, noting that it is not confined to government exercise of statutory powers, or to decisions or conduct which have an immediate impact on lands and resources – a potential for adverse impact suffices, and the duty extends to strategic, higher level decisions.[4]

However, the questions of who is the “Crown” and what constitutes “Crown conduct” for the purposes of triggering the duty to consult are aspects of the Haida Test that have remained somewhat elusive, and lower courts have struggled to achieve consensus in defining the scope of these terms. Faced with this issue in both Clyde River and Chippewas, the Federal Court of Appeal (FCA) concluded that only the actions of a minister of the Crown or a government department, or a Crown corporation (as in Rio Tinto) could constitute Crown conduct sufficient to trigger the duty to consult. In Clyde River, the FCA held that the duty to consult was narrowly triggered by a statutory requirement for ministerial approval of a benefits plan. In Chippewas, the FCA determined that since the Crown was not a party before the NEB, the only Crown conduct potentially in issue was the enactment of the NEB Act.[5]

The SCC clarified this aspect of the Haida Test in Clyde River and Chippewas and took a more expansive approach than the FCA. The SCC held that in both cases, the NEB’s approval process was the conduct that triggered the duty to consult. The SCC held that for purposes of the duty to consult, the “Crown” refers in a broad sense to the exercise of executive power. Although the NEB operates independently of the Crown’s ministers and is not, strictly speaking, the “Crown” (in the sense of Her Majesty of the Canadian state, or the head of executive authority), or an agent of the Crown, the NEB does exercise executive power on behalf of the Crown pursuant to its statutory authority, and “is the vehicle through which the Crown acts”. By exercising such statutory authority, the NEB acts on behalf of the Crown when making a final decision on a project application. The SCC held that this clearly constitutes Crown action.[6]

The SCC also addressed situations in which the Crown (in the strict sense of the word) is absent from a regulatory proceeding. In Chippewas, the FCA followed a 2009 decision of the FCA, Standing Buffalo Dakota First Nation v. Enbridge Pipelines,[7] to conclude that, unless the Crown was a party before the NEB, the NEB was not required to evaluate whether the Crown’s duty to consult was triggered, or had been met, before granting an authorization. The SCC disagreed with this approach, finding that if the duty to consult has been triggered, when the NEB is the final decision maker in a project approval, it must ask whether the duty to consult has been fulfilled. If it has not been fulfilled, the NEB must withhold project approval, or the decision could be quashed on judicial review.[8]

Further, the SCC stated that where a concern with the adequacy of consultation is raised before a regulatory agency such as the NEB, it will usually be obliged to address those concerns in reasons, particularly in project applications requiring deep consultation.[9] However, this does not mean that the regulatory agency must apply a formulaic “Haida analysis” to assess the strength of claim and the appropriate degree of consultation, and explicit reasons may not be required in every case.[10] In Chippewas, for example, the SCC was satisfied with the NEB’s approach; in written reasons, it did not explicitly assess the depth of consultation required, but expressly recognized the Aboriginal rights and interests at issue, considered the potential for negative impacts on such rights and interests, and considered whether all Indigenous groups had been adequately consulted.[11]

2. Sufficiency of Regulatory Processes in Fulfilling the Duty to Consult

In both Clyde River and Chippewas, the Appellants argued that regulatory processes alone cannot fulfill the duty to consult and there has to be at least some direct engagement between the Crown and affected Aboriginal groups, particularly when deep consultation is required.

The SCC rejected these arguments and held that the Crown can rely on a regulatory agency or tribunal, in whole or in part, as long as the agency or tribunal possesses the statutory powers to do what the duty to consult requires in the particular circumstances. The SCC also provided two further caveats. First, where the regulatory process being relied upon does not achieve adequate consultation or accommodation, the Crown must take further measures to meet the duty to consult either on a case-by-case basis or through legislative or regulatory amendments. Second, where the Crown is relying on regulatory processes to fulfill the duty to consult, it must make that clear to affected Indigenous groups. The Court held that the Crown should provide guidance about the form of the consultation process in order for Indigenous peoples to know how consultation will be carried out to allow for their effective participation and allow them to raise concerns with the proposed form of consultation.[12] However, the SCC did not provide detailed guidance on what this notice should entail and the sufficiency of this notice may become an issue of dispute in future cases. The issue of notice may also be raised in future cases where the Crown is relying upon proponents to fulfill the duty to consult.

In both cases, the SCC held that the NEB has the necessary procedural and remedial powers to completely or partially fulfill the duty to consult and has considerable institutional expertise. Although the Court held that the duty to consult had not been fulfilled in Clyde River, the deficiencies arose from the specific process deployed in that case and not with the NEB process as a whole. In particular, the SCC held that there were insufficient opportunities for Indigenous participation and consultation due to a lack of oral hearing, the lack of capacity funding, the inability of the proponents to answer basic questions at the consultation sessions, and an inaccessible data dump late in the process. The SCC also raised concerns about the adequacy of notice about the government’s reliance on the NEB process, the focus of the consultation inquiry (on environmental effects rather than impacts to rights) and the adequacy of accommodation.

The SCC’s acceptance of the NEB process in principle is timely given the different conclusions reached in the reports of the CEAA and NEB expert panel reviews. In particular, the CEAA Expert Panel concluded that “current EA processes are insufficient for fulfilling the duty to consult” which by implication would extend to the NEB process. This report preceded the SCC’s decisions in Clyde River and Chippewas but there had been several cases prior to this that have upheld the federal government’s reliance on EA processes to fulfill the duty to consult in whole or in part.[13]

The NEB and CEAA expert panel reports and the federal government’s Discussion Paper released in June in response to these reports propose a number of changes that would go beyond what is required by the duty to consult. Although some of these changes may assist in reducing the number of consultation disputes, the SCC’s decisions in Clyde River and Chippewas provide a basis to question the extent of the changes required.

3. The appropriate focus of consultation is the potential impact on Aboriginal rights, rather than environmental impacts

In Clyde River, the SCC reaffirmed that consultation with Indigenous groups on a proposed project should not be undertaken with regard to the environmental effects of the project, per se, but rather, the impact that those environmental effects will have on proven or asserted Aboriginal rights.[14] Certain environmental effects that may seem insignificant in themselves may severely affect the ability of Aboriginal groups to exercise their rights.

On this basis, the SCC held that one of the ways in which the consultation conducted in Clyde River was inadequate was that it failed to consider the impact of the seismic testing on the appellants’ rights, including their treaty right to harvest marine mammals. As noted by the appellants in their submissions, the NEB’s environmental assessment report made no reference to the rights of the Inuit groups affected by the proposed seismic testing.[15] Rather, after summarizing the nature of the of consultative activities performed and the groups engaged, the NEB report moved to a discussion of the likely environmental effects of the seismic testing. According to the SCC, the NEB ignored the question of how these environmental effects would affect the Inuit groups being consulted, undermining the entire purpose of the consultation process.

In contrast, in Chippewas, the NEB’s reasons for decision expressly referred to Aboriginal rights and provided a review of the ways in which the proposed project might impact those rights. Accordingly, the SCC in Chippewas did not take issue with this aspect of the NEB’s decision. The NEB’s reasons included a section titled “Impacts on Aboriginal groups,” which analysed “[p]roject impacts on the rights and interests of Aboriginal groups.”[16] This section considered the nature of the consultation process as conducted, the impacts of the proposed project, and proposed mitigation efforts on the rights of the Aboriginal groups affected by the project. As the project affected already-disturbed lands, and the NEB’s analysis was limited to the newly proposed changes rather than the current operations, the NEB held that the impacts of the project would be minimal and likely to be appropriately mitigated.

In our view, this approach is consistent with both the constitutional protection of Aboriginal and treaty rights under section 35, and with the federal government’s recently proposed legislative amendments to include express consideration of impacts on Indigenous peoples in regulatory decision-making without requiring an underlying biophysical impact. However, the SCC’s conclusions in Clyde River that the NEB did not assess the impact to the Inuit’s treaty right to harvest marine mammals is somewhat questionable. The Court did not use these words but it did assess impacts to marine mammals and impacts on Inuit traditional harvesting of marine mammals which align with the treaty right at issue.

4. The subject of consultation is the impact of the current decision, but a consideration of historical impacts and cumulative effects may play a contextual role

In Chippewas, the pipeline at issue was initially constructed in 1976 without consultation with First Nations. Although the project approval before the NEB concerned a pipeline modification and flow reversal on previously disturbed lands, the Chippewas of the Thames also raised concerns regarding the cumulative impacts on its Aboriginal rights and title that could result from the project. Another intervenor First Nation noted that there is no consultation process in place to address the broader impact of pipelines on First Nations in southern Ontario.

The SCC reiterated its findings in Rio Tinto that the duty to consult is not triggered by historical impacts, and consultation is not the appropriate vehicle to address historical wrongs or grievances. Further, the Crown is not required to consult on larger impacts of a project of which a particular decision is a part. The duty to consult “is not about resolving broader claims that transcend the scope of the proposed project.”[17] Rather, the scope of the duty to consult is confined to “adverse impacts flowing from the specific Crown proposal at issue” and the “impact on claimed rights of the current decision under consideration.”[18]

In Chippewas, however, the SCC made a further effort to address the role that historical impacts and cumulative effects may have in shaping the subject matter of consultation. The SCC stated that “it may be impossible to understand the seriousness of the impact of a project on s. 35 rights without considering the larger context.” Citing the British Columbia Court of Appeal’s 2011 majority decision in West Moberly First Nations v. BC (Chief Inspector of Mines), the SCC stated that both the cumulative effects of an ongoing project and the historical context may “inform the scope of the duty to consult.” A consideration of cumulative effects and historic context is not intended to redress past wrongs, but to recognize an existing state of affairs and to address potential consequences of a project.[19]

In our view, the distinction that the BC Court of Appeal attempted to draw in West Moberly remains murky. Given the lack of guidance from the SCC on what this means in practical terms, there will likely be future litigation about how and what cumulative effects and historical context can impact the scope of consultation. As a practical matter, the SCC’s comments leave open the possibility that historical impacts and cumulative effects could become an inappropriate focus and potentially burdensome aspect of consultation in certain circumstances. It also raises questions about the responsibilities of proponents and what they can reasonably be expected to address in the context of an individual project review, particularly with respect to accommodation.

5. Duty to Consult Does Not Provide a Veto and Aboriginal Rights Can be Balanced with the Broader Public Interest

One of the key issues in both Chippewas and Clyde River was whether the NEB’s obligation to make decisions in the public interest, as required by the NEB Act, conflicted with its constitutional obligation to fulfil the duty to consult, as the constitutional nature of the latter prevented affected Indigenous interests from being balanced against broader public interests.

The SCC found that the duty to consult does not conflict with the broader public interest, but rather, properly understood, was one element of it. In both decisions, the SCC re-affirmed its holding in Rio Tinto that “the constitutional dimension of the duty to consult gives rise to a special public interest” that “surpasses economic concerns”,[20] and which must be considered by a decision-maker whenever the duty to consult is triggered. Further, the SCC held that a decision cannot be in the public interest where the duty to consult is not satisfied, as “a project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest.”[21]

The SCC held that while a decision cannot be in the public interest without considering the “special public interest” of affected Indigenous groups that the duty to consult gives rise to, the SCC continued to find that this special public interest must also be balanced and weighed against other public interest considerations relevant to the decision. The special public interest that results from the duty to consult is therefore not determinative of the broader public interest, but is one factor that must be considered by a decision-maker when assessing it. As the SCC held, “it is for this reason that the duty to consult does not provide Indigenous groups with a “veto” over final Crown decisions.”[22] Rather, it is one factor, among others, that must be considered and balanced when assessing a decision’s impact on the overall public interest.

The SCC’s re-affirmation that the duty to consult does not provide impacted Indigenous groups with a veto over development projects is noteworthy in light of the Government of Canada’s declaration of support for the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which includes the concept that states should obtain the free, prior and informed consent (FPIC) of Indigenous groups in a number of situations, including for resource development in their traditional territories.

While Canada has stated that it supports UNDRIP without qualification, the federal government has also said that it will interpret FPIC in line with the Canadian Constitution, including the duty to consult. The SCC’s decisions in Clyde River and Chippewas make clear that the Canadian Constitution does not provide Indigenous groups with a unilateral right to determine whether a development project proceeds or not (except in limited circumstances where Aboriginal title is established – per Tsilhqot’in). Rather, the duty to consult affords Indigenous groups the right to have their interests heard, considered, and balanced against other legitimate public interests that are relevant to a particular project. As the SCC held in Chippewas, Indigenous groups “are not entitled to a one-sided process, but rather, a cooperative one with a view towards reconciliation”, and that “balance and compromise are inherent in that process.”[23]

]]>http://www.canadianeraperspectives.com/2017/11/the-role-of-regulatory-tribunals-in-aboriginal-consultation-the-key-takeaways-from-hamlet-of-clyde-river-and-chippewas-of-the-thames/feed/0http://www.canadianeraperspectives.com/2017/11/the-role-of-regulatory-tribunals-in-aboriginal-consultation-the-key-takeaways-from-hamlet-of-clyde-river-and-chippewas-of-the-thames/In Pursuit of Sustainable Communities: Survey finds that Indigenous Participation is Driving Clean Energy Growth in Canadahttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/AUcRSGGvwn0/
http://www.canadianeraperspectives.com/2017/10/n-pursuit-of-sustainable-communities-survey-finds-that-indigenous-participation-is-driving-clean-energy-growth-in-canada/#respondMon, 16 Oct 2017 17:29:26 +0000http://www.canadianeraperspectives.com/?p=1204Continue Reading]]>A pioneering survey has found that Indigenous participation in Canada’s clean energy economy has grown rapidly over the past 20 years, in all regions of the country. Lumos Clean Energy Advisors (Lumos), an advisor to First Nations, Métis and Inuit communities, undertook a review of national research and drew on the company’s database of clean energy projects. In particular, Lumos looked at 152 medium to large-scale solar, wind, hydro and bio-energy clean energy projects now in operation (medium to large projects are categorized as renewable energy projects generating one (1) megawatt of electricity at full operating capacity). The resulting report, Powering Reconciliation: A Survey of Indigenous Participation in Canada’s Growing Clean Energy Economy, highlights the importance of federal and, particularly, provincial/territorial government policies in the areas of energy, climate change and economic development to the rise of Indigenous participation in the clean energy sector. The report also found the following:

BC leads the way nationally, with 52% of Indigenous clean energy projects in operation, followed by 24% of projects in Ontario and 10% of projects in Québec. The remaining projects are spread across the Maritime provinces, the Prairies and the Territories. An interactive map of projects is available online. The report notes that Saskatchewan and Alberta are now moving into an Indigenous clean energy growth phase. In addition, major growth is anticipated over the next three to five years in over 175 off-grid, remote and northern Indigenous communities as they transition away from diesel-reliant energy.

Hydroelectric is the most dominant resource for Indigenous renewable energy projects, comprising 63% of all Indigenous clean energy projects. Wind projects are growing and represent 24% of Indigenous clean projects; the remaining 13% of projects are split among three technologies – solar (eight projects in Ontario), biomass (seven projects in BC and one in Québec) and district heating (in Nunavut).

The generating capacity of clean energy projects with Indigenous partnerships is substantive, totalling 19,516 megawatts, which represents nearly one fifth of Canada’s overall power production infrastructure and $56 billion in capital construction costs.

Actual equity investment from Indigenous/developer/utility partners ranges from 10-15% of total capital requirements, meaning that the majority of project capital is financed through long-term debt.

The norm is for Indigenous communities/partners to hold approximately 25% of ownership in clean energy projects. The report estimates that Indigenous communities have invested $1.8 billion in equity in clean energy projects. The source of Indigenous investment varies by project and includes community funds, funds from treaty settlements and land claims, community trusts, debt financing through the project developer, direct grants from the project developer, external borrowing on full commercial terms, and/or external borrowing backstopped by guarantees provided by governments, Indigenous financial institutions or project partners.

Using project metrics, the report estimates that Return on Investment averaged 14% for projects constructed prior to 2014, 12% for projects constructed from 2014 to the present, and the trend going forward appears to be in the range of 10%.

Over the next 15 years, Indigenous communities will generate at least $2.5 billion in profit from clean energy project investments.

Ancillary benefits from projects include local infrastructure upgrades, community energy literacy and planning, community program support, housing improvements, and cultural features (such as the integration of Indigenous art into clean energy facilities).

In addition to medium and large-scale projects, over 1,200 small-scale renewable energy projects have been constructed with Indigenous participation.

The report notes that first and foremost, Indigenous communities seek clean energy projects with low to minimal ecological impacts on land, water, fisheries and wildlife. Also, the report notes that clean energy projects with Indigenous participation embody the process of national reconciliation between Canada and Indigenous peoples. In response to the survey, many Indigenous leaders expressed that the most important benefit arising from participation in clean energy projects was a strengthening of community pride and an affirmation of Indigenous rights and territory. In addition, a significant number of Indigenous respondents spoke of the respectful relationships arising through solar, wind, hydro and bio-energy initiatives with project partners, government programs and energy authorities. With an additional 50 to 60 medium to large-scale renewable projects with Indigenous participation expected to come online over the next five to six years, Indigenous engagement in renewable energy projects looks set to continue driving the growth of Canada’s clean energy economy and supporting reconciliation efforts.

]]>http://www.canadianeraperspectives.com/2017/10/n-pursuit-of-sustainable-communities-survey-finds-that-indigenous-participation-is-driving-clean-energy-growth-in-canada/feed/0http://www.canadianeraperspectives.com/2017/10/n-pursuit-of-sustainable-communities-survey-finds-that-indigenous-participation-is-driving-clean-energy-growth-in-canada/Changing Tack: BC NDP Accelerates Increase in Carbon Tax and Moves Away from Revenue Neutralityhttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/59S3XtQzpQo/
http://www.canadianeraperspectives.com/2017/09/changing-tack-bc-ndp-accelerates-increase-in-carbon-tax-and-moves-away-from-revenue-neutrality/#respondTue, 26 Sep 2017 20:15:42 +0000http://www.canadianeraperspectives.com/?p=1201Continue Reading]]>BC’s recently sworn-in New Democratic Party (NDP) government presented its first provincial budget on September 11, 2017. Among the policy measures announced were changes to the BC carbon tax. In particular, the Budget 2017 Update (2017/18 – 2019/20) provides for the following:

As of April 1, 2018, the carbon tax will increase by $5 per tonne of carbon dioxide equivalent (CO2e) per year until it reaches the federal target carbon price of $50 on April 1, 2021 (one year before Ottawa’s 2022 deadline). BC’s carbon tax is currently set at $30 per tonne of CO2e.

Part 2 of the Carbon Tax Act has been repealed, meaning that the requirement for the provincial Minister of Finance to prepare the Carbon Tax Report and Plan will no longer apply after September 11, 2017. In addition, this means that the Carbon Tax Act will no longer require that revenue measures be introduced to offset carbon tax revenues. This will allow the government to spend carbon tax revenues on emission reduction measures or other green initiatives, rather than returning carbon tax revenues to taxpayers.

When BC’s carbon tax was first introduced in 2008, it was considered the most comprehensive and transparent carbon tax in North America and abroad. One of the key features under the Carbon Tax Act was the reporting mechanism under Part 2, which required the government to prepare an annual carbon tax plan estimating the amount of carbon tax revenues collected and forecast to be collected, and how such revenues would be allocated. The inclusion of such a reporting mechanism is fundamental to ensuring that carbon tax revenues are subject to a certain level of scrutiny, thus making the government accountable for the use of those revenues. In designing its cap-and-trade system, the Ontario government recognized the importance of transparency to stakeholders when it included a mechanism in the Climate Change Mitigation and Low-Carbon Economy Act which requires money raised from the cap-and-trade program to be deposited into the province’s Greenhouse Gas Reduction Account. Funds from this account are invested in green projects and initiatives that reduce emissions. Prior to the finalization of Ontario’s cap-and-trade program, the legislation was strengthened by requiring enhanced accountability and public reporting on the investment of cap-and-trade proceeds in the province’s Climate Change Action Plan. It is unclear at this time which mechanism, if any, the BC NDP will implement to maintain transparency and accountability for the allocation of carbon tax revenues in the province. Over the coming weeks and months, the BC NDP is expected to articulate its policy priorities on a range of issues, including environmental and climate change matters. Please stay tuned for further developments.

]]>http://www.canadianeraperspectives.com/2017/09/changing-tack-bc-ndp-accelerates-increase-in-carbon-tax-and-moves-away-from-revenue-neutrality/feed/0http://www.canadianeraperspectives.com/2017/09/changing-tack-bc-ndp-accelerates-increase-in-carbon-tax-and-moves-away-from-revenue-neutrality/NAFTA Renegotiations: Will changes to environmental and labour standards be “very difficult”?http://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/35nfMFnSarA/
http://www.canadianeraperspectives.com/2017/09/nafta-renegotiations-will-changes-to-environmental-and-labour-standards-be-very-difficult/#respondTue, 26 Sep 2017 16:59:49 +0000http://www.canadianeraperspectives.com/?p=1197Continue Reading]]>On August 27, President Trump tweeted that both Canada and Mexico were being “very difficult” during the ongoing renegotiations of the North American Free Trade Agreement (“NAFTA”). Without question the three countries’ trade representatives have a lot areas to cover in the negotiations, but environmental and labour standards are two areas that have been taking a back seat. This begs the question – what changes can we expect see in NAFTA 2 on environmental and labour standards?

The information we have to go by is limited so far. On July 17, the US Trade Representative released an 18 page document entitled “Summary of Objectives for the NAFTA Renegotiation”. This document sets out the goals of the United States for revisions to NAFTA (the “US Objectives”). Mexico reportedly released its objectives document on August 1 (the “Mexican Objectives”). Canada has arguably provided the least public information as to its objectives – on August 14, Foreign Affairs Minister Chrystina Freeland delivered a speech on the modernization of NAFTA and posted the text online (the “Canadian Objectives”).

Based the three countries’ objectives statements, the most likely change to environmental and labour standards will be the inclusion of two side agreements into the text of NAFTA 2 itself – the North American Agreement on Environmental Cooperation (“NAAEC”) and the North American Agreement on Labour Cooperation (“NAALC”). Over the past two decades, World Trade Organization nations have made it standard practice to include separate chapters for environmental and labour provisions. The US Objectives explicitly propose that both environmental and labor provisions be brought “into the core of the Agreement rather than in a side agreement”. These agreements and changes made to them will have to be reconciled with existing Chapter 11 on investments (see, in particular, articles 1106 and 1114).

What is less certain will be how these two new chapters are amended. The US is most likely to draw directly from Trans-Pacific Partnership (“TPP”), an agreement it pulled out of shortly after Trump took office, whereas Canada is more likely to draw from the recently adopted Canada-European Union Comprehensive Economic and Trade Agreement (“CETA”). TPP has weaker protections for workers and the environment, but for the protections it does include the enforcement mechanisms are likely strong. Conversely, CETA has much stronger worker and environmental protections (including initiatives to combat climate change), but is quite weak on enforcement.

The strength of environmental and labour provisions that are adopted will largely be determined by the investor-state dispute settlement system that the parties adopt. You can read more on dispute resolution under NAFTA on our International Arbitration Blog, but pressure has been steadily increasing for greater transparency and public access to dispute settlement under NAFTA 2.

]]>http://www.canadianeraperspectives.com/2017/09/nafta-renegotiations-will-changes-to-environmental-and-labour-standards-be-very-difficult/feed/0http://www.canadianeraperspectives.com/2017/09/nafta-renegotiations-will-changes-to-environmental-and-labour-standards-be-very-difficult/Taking on the Political Hot Potato of Pipelines: BC’s Attorney General Granted Intervenor Status in Federal Court of Appeal Proceeding Challenging Trans Mountain Pipeline Approvalshttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/tY_Yaz_HeWo/
http://www.canadianeraperspectives.com/2017/09/taking-on-the-political-hot-potato-of-pipelines-bcs-attorney-general-granted-intervenor-status-in-federal-court-of-appeal-proceeding-challenging-trans-mountain-pipeline-approvals/#respondFri, 22 Sep 2017 17:58:11 +0000http://www.canadianeraperspectives.com/?p=1192Continue Reading]]>The proposed Trans Mountain Expansion Project (the Project) involves a $7.4-billion expansion of the Kinder Morgan pipeline stretching from Edmonton to Burnaby, as well as the construction of new works such as pump stations and tanks and the expansion of an existing marine terminal. In December 2016, the Project received federal government approval, after the National Energy Board (NEB) recommended in May 2016 that the Project should proceed, subject to the satisfaction of 157 conditions. Under the Constitution Act of 1867, the regulation of international and inter-provincial transportation (which includes pipelines) falls within the exclusive jurisdiction of the federal government.

In January 2017, the Project received its provincial environmental assessment certificate along with a political green light to move forward. In expressing the province’s support for the Project, then Premier Christy Clark indicated that the Project had met the five conditions the provincial government had issued in 2012 for approving any pipeline projects. Following the close results of BC’s provincial election in May 2017, the NDP formed a government with the backing of the BC Green Party. In Premier John Horgan’s July 2017 mandate letter to the new Minister of Environment and Climate Change Strategy, George Heyman, the Minister was tasked with employing “every tool available to defend BC’s interests in the face of the expansion of the Kinder Morgan pipeline, and the threat of a seven-fold increase in tanker traffic on our coast”, among other things. This is the context within which the Attorney General of BC (the AG) sought – and was ultimately granted – intervenor status in the upcoming Federal Court of Appeal proceeding challenging the administrative approvals for the Project, discussed in further detail below.

Background

On August 29, 2017, the Federal Court of Appeal (the Court) rendered its decision in Tsleil-Waututh Nation v. Canada (Attorney General) (2017 FCA 174) granting the Attorney General of British Columbia intervenor status in the upcoming court proceeding challenging administrative approvals of the Project. The project approvals at issue were granted by the NEB and the federal government on May 19, 2016 and December 10, 2016, respectively. The applicants challenging the approvals – which include a number of First Nations, municipalities, and environmental groups – are arguing that the approvals violate various administrative, statutory, and constitutional principles, and that therefore the approvals must be quashed.

Motion to Intervene

Five weeks after the new BC NDP government took office in July 2017, the AG brought a motion seeking leave to intervene in the federal court proceeding under Rule 110(c) of the Federal Court Rules (SOR/98-106), which permits attorneys general to apply for leave to intervene where “a question of general importance is raised”. The motion was filed well after the deadline to seek intervenor status had passed on April 13, 2017, which fell just two days after writs of election were issued in BC. Despite the late filing, the Court considered the motion.

In its reasons, the Court criticized the AG for having delayed five weeks before bringing his motion, for filing materials “offering just a handful of meaningful paragraphs”, for failing to specify exactly how he intended to participate in the proceeding, and for his lack of understanding as to the “basic ground rules” of the proceeding he sought to enter. Indeed, the Court described the AG’s approach as “blasé”.

On the other hand, the Court acknowledged that there was a “question of general importance” to be addressed, as well as a strong nexus between the issues raised in the proceeding and the interests of the BC government and its populace. The Court further noted that the Attorney General of Alberta, who supports the project, had already been granted intervenor status. The Court reasoned that it would be appropriate to permit the AG, who opposes the project, to intervene as well, as doing so would promote fair treatment to both sides and allow the public interest of BC to have a voice in the proceeding.

The Court concluded that although the motion was a “close call”, it would permit the AG to intervene. However, it did so on strict terms. It gave the AG just three days to file its materials, stipulating September 1 as the deadline. It added that the AG would not be permitted to introduce new evidence. The Court also emphasized that the AG would not be permitted to expand the scope of issues to be addressed, stating:

In this Court, interveners are guests at a table already set with the food already out on the table. Interveners can comment from their perspective on what they see, smell and taste. They cannot otherwise add food to the table in any way.

The Court observed that a number of issues the AG sought to address would go beyond the scope of what was “already out on the table”. For example, the AG indicated that it intended to raise certain issues concerning the constitutional limits of the BC government’s ability to regulate the project, as well as questions about cooperative federalism in Canada that had not been raised by the parties. The Court refused to permit the AG to speak to these matters. Furthermore, the Court affirmed that its role is to grapple with legal arguments; larger political issues that do not bear on those arguments must be considered “irrelevant and distracting” and therefore inadmissible. The Court cautioned that should the AG fail to abide by its instructions, his intervenor status could be revoked.

Next Steps

On September 1, 2017, the AG filed his materials in support of his position that the project approvals should be quashed. In a press release issued that same day, the AG summarized the thrust of his submissions, stating that the Project has “a disproportionate impact on BC’s marine coastal environment and Indigenous peoples” and that the federal approval process failed “to properly consider the profound economic risks associated with a bitumen spill on our coast”. These submissions will be considered at the hearing of the application, which is scheduled to take place over seven days in early October 2017. Given the extraordinary volume of materials and the considerable length of the hearing, it will likely be many months before the Court renders a decision on the matter.

The federal court proceeding is not the only challenge to the Project. In April 2017, the Squamish First Nation (the Squamish) filed a petition in BC Supreme Court challenging the previous BC Liberal government’s issuance of an environmental assessment certificate for the Project in January 2017. The Squamish argues that the government failed to engage in adequate consultation with First Nations prior to issuing the certificate. The BC government, which is named as a respondent, has engaged former BC Supreme Court justice Thomas Berger, Q.C. to advise the government on this litigation and the federal court proceeding.

Work on the Project is scheduled to commence in September 2017, though there remain a number of outstanding conditions to the provincial and NEB approvals that must be fulfilled before work begins.

]]>http://www.canadianeraperspectives.com/2017/09/taking-on-the-political-hot-potato-of-pipelines-bcs-attorney-general-granted-intervenor-status-in-federal-court-of-appeal-proceeding-challenging-trans-mountain-pipeline-approvals/feed/0http://www.canadianeraperspectives.com/2017/09/taking-on-the-political-hot-potato-of-pipelines-bcs-attorney-general-granted-intervenor-status-in-federal-court-of-appeal-proceeding-challenging-trans-mountain-pipeline-approvals/Indigenous and Northern Affairs Canada (INAC) portfolio to be split, in initial step towards ending the Indian Act and accelerating the move to self-governmenthttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/p8j9pGMSwYc/
http://www.canadianeraperspectives.com/2017/08/indigenous-and-northern-affairs-canada-inac-portfolio-to-be-split-in-initial-step-towards-ending-the-indian-act-and-accelerating-the-move-to-self-government/#respondThu, 31 Aug 2017 16:24:15 +0000http://www.canadianeraperspectives.com/?p=1189Continue Reading]]>On August 28, 2017, the Federal Government announced a cabinet shuffle that includes plans to split the current Ministry of Indigenous and Northern Affairs Canada (INAC) into two distinct Departments: (1) Crown-Indigenous Relations and Northern Affairs and (2) Indigenous Services.

The new Department of Crown-Indigenous Relations will be led by the former INAC Minister Carolyn Bennett and in essence will “guide the Government’s forward-looking and transformative work to create a new relationship with Indigenous Peoples.” The new Department will be tasked with improving “nation-to-nation, Inuit-Crown, and government-to-government relationships, to accelerate self-government and self-determination agreements based on new policies, laws and operational practices, and to develop a framework to advance a recognition of rights approach”. Accordingly, the Department will likely deal with matters that currently fall within the Treaties and Aboriginal Government section of INAC, such as the negotiation of land claims/modern treaties, sector specific self-government agreements (i.e. in education, health-care etc.), and specific claims, treaty implementation, and the government’s overall policy and approach to consultation and accommodation. It is likely that the current Policy and Strategy Direction division or at least a large portion of it would also fall under this new department, which would include management of most of the government’s extensive portfolio of Aboriginal litigation (shared with the Department of Justice), coordination with provincial governments on Indigenous issues, and the current reconciliation secretariat.

The new Department of Indigenous Services will be led by the former Health Minister Jane Philpott. It will be tasked with improving the quality of services delivered to non-self-governing Indigenous communities, focusing on improving outcomes in six priority areas: child and family services, health care, infrastructure, education, food security, and shelter and housing. Certain services currently delivered to Indigenous peoples by other departments will also be considered for transfer into the new Department, which will likely include many of the services currently delivered by Health Canada to Indigenous peoples. Based on the described mandate, this may include reserve land management issues (i.e. leases, permits, and licences relating to the use of reserve land and the successful First Nations Land Management Regime) or the Lands and Economic Development division may be divided between the two departments.

The Federal Government views these changes as a step towards improving the delivery of services as well as accelerating a move towards self-government and self-determination of Indigenous peoples. In his statement on the changes, Prime Minister Trudeau indicated that these changes are needed “to shed the administrative structures and legislation that were conceived in another time for a different kind of relationship.” More particularly, he indicated that there is a need to moving beyond existing colonial structures, with a view to moving beyond the Indian Act and moving forward with a true nation-to-nation partnership. The Prime Minister stated that “INAC is charged with implementing the Indian Act, a colonial, paternalistic law” and “INAC was also not designed or conceived of to support and partner with Inuit and Métis peoples, based on their unique histories, circumstances and aspirations.”

The Federal Government modelled the changes on a recommendation in the five-volume Report of the Royal Commission on Aboriginal Peoples released in 1996. The Royal Commission was established with a broad mandate to study and determine the foundations of a fair and honourable relationship between the Aboriginal and non-Aboriginal people of Canada, and to propose practical measures to repair the past relationship and establish a new relationship. The Report called for a split model to replace the then Department of Indian Affairs and Northern Development with an Aboriginal Relations Department and an Indian and Inuit Services Department. One department would implement the new relationship with Aboriginal nations, while the second would administer continuing services for groups that had not yet opted for self-government. The Report continues to be regarded by the Federal Government as one of the key policy documents to be consulted as it moves forward in establishing a renewed nation-to-nation relationship, in addition to the calls to action of the Truth and Reconciliation Commission and the Kelowna Accord.

While some view the changes to the current model with skepticism about the potential to increase bureaucracy and create competition for government resources between the two Departments, Chief Perry Bellegarde of the Assembly of First Nations views the change favourably and stated that the dissolution of INAC is a significant step “towards restoring and revitalizing the nation-to-nation relationship between First Nations and the Crown” and “signals a new approach to increasing action across our agenda” to move beyond the Indian Act and re-assert jurisdiction and sovereignty over lands, title and rights.

Although all changes of this nature depend on proper implementation, it is a change in our view that is worth pursuing as the mandate of the current INAC department is too broad and the divided focus has contributed to slow progress in both areas over many years. There will likely be some duplication between the two departments given that all of the government’s dealings with Indigenous peoples raise relationship issues and can positively or negatively impact the overall relationship. It will also be important to ensure that the new Department of Crown-Indigenous Relations is not seen as being solely responsible for the Crown’s relationship with Indigenous peoples. All departments have some role in the overall relationship, many of which can have a significant impact on the overall relationship such as the Department of Fisheries and Oceans and Ministry of Environment and Climate Change and its agencies. This issue is discussed in further detail in a report to Minister Carolyn Bennett titled Building Relationships and Advancing Reconciliation through Meaningful Consultation which was authored by McCarthy Tétrault lawyer and former INAC Ministerial Special Representative, Bryn Gray.

The Federal Government states that the dissolution of INAC will occur in stages, and legislative amendments will be required in order to effect the dissolution of INAC and form the new Departments. Further, the Federal Government intends to undertake the restructuring process in cooperation with Indigenous peoples and through extensive consultations. One of Minister Bennett’s tasks will be to lead such a consultation process on the restructuring. Considering the work ahead, the anticipated timeline for finalizing such changes, as well as the potential practical effects of these new changes are not yet known. However, further details of the particular mandates of each Department are expected to be released in mandate letters to the Ministers in the coming weeks.

]]>http://www.canadianeraperspectives.com/2017/08/indigenous-and-northern-affairs-canada-inac-portfolio-to-be-split-in-initial-step-towards-ending-the-indian-act-and-accelerating-the-move-to-self-government/feed/0http://www.canadianeraperspectives.com/2017/08/indigenous-and-northern-affairs-canada-inac-portfolio-to-be-split-in-initial-step-towards-ending-the-indian-act-and-accelerating-the-move-to-self-government/Failure to Disclose: In Finding Negligent Misrepresentation, BC Supreme Court Holds that Potential Contamination on a Property Gives Rise to Stigmahttp://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/ls-AdshRfC8/
http://www.canadianeraperspectives.com/2017/08/failure-to-disclose-in-finding-negligent-misrepresentation-bc-supreme-court-holds-that-potential-contamination-on-a-property-gives-rise-to-stigma/#respondMon, 28 Aug 2017 20:04:38 +0000http://www.canadianeraperspectives.com/?p=1185Continue Reading]]>In a recent decision of the BC Supreme Court (the Court), the purchasers of a residential property in Victoria were awarded damages when the Court found that the seller made negligent misrepresentations in the property disclosure statement (PDS) regarding the possible migration of contaminants onto the property. In their claim, the plaintiffs alleged that the defendant was liable for damages for fraudulent misrepresentation, negligent misrepresentation or breach of contract. While the plaintiffs were unable to meet the test for fraudulent misrepresentation (the Court found no intent by the seller to deceive the purchasers), the Court said that a misrepresentation in a PDS can give rise to a claim for damages for negligent misrepresentation. The Court’s judgment in Ban v. Keleher (2017 BCSC 1132, 30 June 2017) confirms that a much higher standard of evidence is required in order to make out a claim of fraudulent as opposed to negligent misrepresentation, which means that what might seem to be fraudulent based on a common sense interpretation is not necessarily what will be found in court. In assessing the damages payable to the plaintiffs, the Court found that the potential presence of contamination and ongoing testing for contaminants on the property created a stigma in respect of the property and as such, the stigma negatively affected the fair market value (FMV) of the property on the date of sale in May 2013. The Court awarded damages in the amount of $95,000, which took into account a reduction in purchase price (as the plaintiffs paid more for the property than it was worth) and a discount for stigma, as well as the loss of enjoyment and use of the property.

Background

The defendant, Mr. Keleher, sold his property to the plaintiffs, Mr. and Mrs. Ban, for $687,500 in May 2013. Subsequent to the purchase and closing, the plaintiffs discovered that their property was potentially affected by chemical contaminants, which were likely to have migrated onto the property from a nearby dry-cleaning business. The plaintiffs had not retained a lawyer to carry out the conveyance of the property, and had not ordered a search of the BC Contaminated Site Registry (the Site Registry). On the PDS however, there was a question for the vendor which stated: “Have you received any other notice or claim affecting the Premises from any person or public body?”, to which Mr. Keleher answered “No”. At no time did Mr. Keleher tell the plaintiffs that he had received two notices from an environmental consulting company in August and September 2012 indicating that there was likely or actual offsite migration of contaminants onto his property (the Notices). Further, Mr. Keleher did not disclose to the plaintiffs that (i) environmental consultants had conducted drilling and/or installed wells in the backyard of his neighbour’s property in the summer of 2012, (ii) five monitoring wells had been installed in the backyard of the property in October 2012, and (iii) new sod had been placed over the monitoring wells installed in the backyard of the property.

At trial, Mr. Keleher testified that he did not disclose the Notices on the PDS because that issue was not “at the forefront of his mind” at the time. He also testified that after signing the PDS, he later sought advice from his realtor as to whether he ought to notify the plaintiffs about the Notices or the presence of the monitoring wells. He stated to the court that his realtor advised him not to reveal this information because it would make it more difficult for him to sell his property. His realtor testified that no such conversation ever took place.

The plaintiffs alleged that the defendant was liable for damages for either fraudulent misrepresentation, negligent misrepresentation, or breach of contract. The Court elected not to address the matter of breach of contract (as it was satisfied that the case could be justly decided based on the claim for misrepresentation), and so confined its analysis to tort law principles.

Fraudulent Representation

On the first claim, Justice Dorgan set out the test for fraudulent misrepresentation from Van Beek v. Dodd (2010 BCSC 1639), where the court held that the five requisite components are:

the defendant made a representation of fact to the plaintiff(s);

the representation was false in fact;

the defendant knew that the representation was false when it was made, or made the false representation recklessly, not knowing if it was true or false;

the defendant intended for the plaintiffs to act on the representation; and

the plaintiffs were induced to enter into the contract in reliance upon the false representation and thereby suffered a detriment.

Justice Dorgan of the Court found that Mr. Keleher had not committed fraudulent misrepresentation on the basis that the standard of proof for fraud is higher than for other torts, in light of the seriousness of an allegation of deceit. Consequently, a plaintiff must prove that the defendant intended to mislead the plaintiff. While Justice Dorgan found that Mr. Keleher was aware of the Notices and the monitoring wells, and had them on his mind at the time of the transaction on the basis that he consulted with his realtor about whether he should have disclosed their existence, the judge held the evidence of the defendant’s intent to deceive the plaintiffs to be insufficient for a finding of fraud. The judge’s findings appear surprising in light of the facts and also because Mr. Keleher’s credibility as a witness was brought into question during the trial, when he made statements that were inconsistent with his evidence given during examination for discovery. Justice Dorgan’s rationale for not finding an intent to deceive on the part of Mr. Keleher was based on the fact that he was a police officer by profession, and therefore was “accustomed to accurately reporting facts”, and that he had not “positively misstated a fact” but rather left the plaintiffs with a false impression. It is interesting to note that his written answer of “No” to the question regarding the Notices was not considered to be a positive misstatement.

This decision appears to be inconsistent with the case cited by the Court for the test of fraudulent misrepresentation, Van Beek v. Dodd. In Van Beek, the defendant property developer represented in its sales literature that the house in question was a new build, and therefore subject to GST. The plaintiffs paid the purchase price plus an additional $40,000 to cover the GST, but later found out that the defendant declared this property as a sale of a former residence for income tax purposes. Even though at no point did the defendant expressly state to the plaintiffs that GST would be payable on top of the purchase price, the court found that the mere presentation of the house and the statements in the sales literature was enough for a finding of fraud.

Negligent Misrepresentation

The plaintiffs were, however, successful in arguing that Mr. Keleher had negligently misrepresented to them the state of the property. The Court was satisfied, based on an earlier British Columbia Supreme Court ruling (Hanslo v. Barry, 2011 BCSC 1624), that the vendor owed a duty of care to the purchasers based on their “special relationship”. In addition, the other four steps of the test for negligent misrepresentation were also made out (these elements include the need for an inaccurate or misleading representation, negligence by the representor in making the representation, reliance by the representee on the misrepresentation, and damages resulted from the reliance), with the result that Mr. Keleher was found to have committed this tort and was liable for damages.

Buyer Beware?

On the doctrine of caveat emptor (let the buyer beware), the plaintiffs claimed that there was nothing in the PDS or any of the surrounding circumstances that should have put the plaintiffs on notice that they needed to make further inquiries. As a result, the defendant could not reasonably argue that the plaintiffs could have discovered the defendant’s fraud if they had conducted a search of the Site Registry (a later search of the Site Registry did not yield any information concerning off-site contamination). The Court noted that where a misrepresentation is properly characterized as being fraudulent, the doctrine of caveat emptor will not apply.

Does Contamination Give Rise to Stigma?

A final point of interest on this case is the Court’s calculation of damages. It affirmed that the proper approach in a case of fraudulent or negligent misrepresentation is to assess the FMV of the property at the time of the sale (accounting for the contamination) and subtract that value from the price paid, with the remaining amount constituting the damages owed to the plaintiffs. The Court considered expert evidence on how to assess FMV for properties impacted by contamination. Since there was no appropriate data available for that period and from that area to use as a comparator, the expert for the plaintiffs assessed property values impacted by the stigma of having been a former grow-op for marijuana production on the mainland of BC around Vancouver. While the expert for the defendant identified several key weaknesses in this data as a comparator group, the Court found that his failure to provide a viable alternative method of assessment meant that the court was obliged to adopt the plaintiff’s approach.

Ultimately the Court was satisfied that stigma does arise when a property is known to be or potentially is contaminated, and found it was irrelevant that the property value had risen by more than the difference between the FMV and the price paid by the plaintiffs. The court also found that stigma in a stable market is of greater consequence than in a rapidly rising or falling market. The fact that the market was stable in 2013 in Victoria, that the property in question was a residential property where the comfort level with contamination is lower than in a commercial transaction, and that there was very little certainty as to the extent of the contamination, caused the court to factor in the impact of stigma considerably. The Court also assessed damages based on the reduced use and enjoyment of the property’s yard, as the presence of the wells now precluded the plaintiffs from building a pool, using that part of the yard for a shed they wished to build or from planting vegetables. Furthermore, the monthly visits by the environmental consulting company to attend to the wells was deemed to be highly intrusive. As a consequence, the Court held that the FMV of the property at the time of the sale was $95,000 less than what the plaintiffs had paid for it, and awarded damages in that amount.

]]>http://www.canadianeraperspectives.com/2017/08/failure-to-disclose-in-finding-negligent-misrepresentation-bc-supreme-court-holds-that-potential-contamination-on-a-property-gives-rise-to-stigma/feed/0http://www.canadianeraperspectives.com/2017/08/failure-to-disclose-in-finding-negligent-misrepresentation-bc-supreme-court-holds-that-potential-contamination-on-a-property-gives-rise-to-stigma/Cap & Trade 2.0: California Fine Tunes and Extends Cap & Trade Program to 2030http://feeds.lexblog.com/~r/CanadianEraPerspectives/~3/eU7jny-K7dg/
http://www.canadianeraperspectives.com/2017/08/cap-trade-2-0-california-fine-tunes-and-extends-cap-trade-program-to-2030/#respondTue, 08 Aug 2017 20:25:56 +0000http://www.canadianeraperspectives.com/?p=1173Continue Reading]]>On July 17, 2017, the California legislature passed legislation to extend the state’s cap-and-trade program to 2030 (the program was originally set to expire in 2020). Bill AB 398 received broad bi-partisan support and was passed with a two-thirds majority vote, which is the threshold required to pass tax laws in California. With a super-majority vote, California’s cap-and-trade program will be harder to challenge in court, thus providing policy certainty to market participants and partner jurisdictions including Québec and Ontario. AB 398 was accompanied by two bills: (1) AB 617, which seeks to address local air quality concerns by requiring increased monitoring, mandating upgrades of outdated equipment and technology, and imposing stricter penalties for noncompliance with regulations; and (2) ACA 1, which establishes the Greenhouse Gas Reduction Fund, into which all revenue from the auction or sale of allowances will be deposited (a 2/3 vote of each house will be required to appropriate the funds). The passage of AB 617 was key to winning over the support of key environmental groups.

By way of background, California Governor Jerry Brown signed SB 32 in September 2016, which requires the state to cut greenhouse gas emissions to 40% below 2020 levels by 2030 (the previous goal was achieving 1990 levels by 2020). However, SB 32 did not provide any details on how California would achieve this goal, casting a shadow of uncertainty over California’s cap-and-trade program beyond 2020. Following SB 32, Governor Brown, legislators and a broad range of stakeholders squabbled over the future of the cap-and-trade program, and various proposal were put forward to either extend the program or overhaul it.

While the nuts and bolts of California’s cap-and-trade program remain the same, several changes have been made to the program, which will likely have impacts for the cap-and-trade programs in Québec and Ontario. These changes include:

Price ceiling: AB 398 establishes a price ceiling for emission allowances, which will be determined by the California Air Resources Board (ARB). Under the current system, there is a reserve of allowances (known as the Allowance Price Containment Reserve or APCR) that can be made available for auction once the price of allowances reaches a specified threshold; this is a mechanism to slow down price increases with an additional supply of allowances. While this reserve has not yet been used, there were some policy concerns about the upward trajectory of allowance prices if the APCR was exhausted, which is a more likely scenario with a more stringent cap after 2020. The price ceiling seeks to address these concerns by containing compliance costs. AB 398 also requires the ARB to take into consideration the social cost of carbon in setting the price ceiling, and allows ARB to transfer current vintages unsold for more than 24 months to the APCR. Analysts have forecast that the ceiling price could reach US $111 by 2030.

Pricing Speed Bumps: AB 398 establishes intermediate price steps or “speed bumps”, which are set at various points between the price floor and price ceiling. Once the allowance price hits any of these speed bumps, an additional supply of allowances (taken from the unused APCR pool) will be released to soften price hikes.

Offsets: AB 398 allows capped emitters to purchase offsets to meet up to 4% of their compliance obligation (down from 8%). This will ratchet up to 6% after 2025. The legislation also requires an increase in offset projects with “direct environmental benefits” in the state, which are defined as the reduction or avoidance of any pollutant that could have an adverse impact on the waters of California. AB 398 also establishes a Compliance Offsets Protocol Task Force that will provide guidance on new offset protocols – the priority will be those projects that increase benefits for disadvantaged communities, Native American or tribal lands, and rural and agricultural regions. It has been reported that California’s offset supply is expected to be well short of future demand, potentially placing upward pressure on offset prices. With more stringent emission reduction targets on the horizon in California, Canadian entities could benefit from this new legislation as suppliers of offsets into the secondary market.

Given the higher cost of abatement in Canada, the price ceiling under AB 398 is important to the Québec and Ontario markets because it will help to contain compliance costs for regulated entities in those jurisdictions. At the same time, the higher price will likely lead to greater abatement action in Canada. In addition, the continued free allocation of allowances to certain capped emitters in California will take the pressure off Québec and Ontario to move to a full auction scenario, which may also help to bolster industry support for cap-and-trade policy.

As California lawmakers work to finalize specific details of the cap-and-trade program, the passage of AB 398 appears to have stabilized the carbon market following a period of volatility. At the ARB’s July 2017 board meeting, the linkage with Ontario was approved, along with provisions to address economic and emission leakages. Upcoming workshops and board meeting will focus on how ARB will address the overall cap beyond 2020, as well as provide further clarity over the use of offsets.